GIP may be considering selling its 42% stake in Gatwick airport

Date added: April 12, 2018

Investment fund Global Infrastructure Partners is considering the sale of its 42% stake in Gatwick Airport, according to people with knowledge of the matter. It is believed that GIP plans to initially seek buyers for its stake among existing shareholders before reaching out to other potential buyers, but this is still speculation. It is not clear if any banks have been hired for the transaction, and GIP may change its mind. Representatives for GIP and Gatwick declined to comment. While GIP is the largest shareholder in the airport, its other owners include funds from Abu Dhabi, California and South Korea. GIP, which manages about $40 billion in assets, bought Gatwick with the consortium of investors in 2009 for about $2.5 billion. Gatwick handled 45.6 million passengers in 2017 and continues to lobby the UK government for permission to build a 2nd runway, to take trade away from Heathrow. GIP, founded in May 2006, manages assets ranging from ports and pipelines to multiple airports and a vast wind farm in the North Sea. Over 10 years, GIP has expanded its roster of backers to include some of the world’s biggest sovereign funds and various US pension funds.
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GIP Considers Sale of Stake in Gatwick Airport

April 10, 2018, (Bloomberg)

Investment fund is seeking to offload its 42 percent stake
GIP bought London airport in 2009 with group of investors

Investment fund Global Infrastructure Partners is considering the sale of its 42 percent stake in London’s Gatwick Airport, according to people with knowledge of the matter.

The fund plans to initially seek buyers for its stake among existing shareholders before reaching out to other potential suitors, the people said, asking not to be identified as the information is confidential. Financial advisers have contacted New York-based GIP about a possible sale, though it isn’t clear if any banks have been hired, they said. No final decisions have been made and the fund may decide not to proceed with a transaction, the people said.

Representatives for GIP and Gatwick declined to comment. While GIP is the largest shareholder in the airport, its other owners include funds from Abu Dhabi, California and South Korea, according to its annual report.

GIP, which manages about $40 billion in assets, bought London’s second-busiest airport with the consortium of investors in 2009 for about $2.5 billion. Gatwick has been under pressure due to intensifying competition from at least two other airports in the city after Heathrow, Europe’s busiest airport, and Stansted, the biggest hub for Ryanair Holdings Plc, this year said they could add almost 30 million more passengers between them yearly without requiring extra runways.

Gatwick has a single landing strip and was able to handle 45.6 million passengers in 2017. Heathrow, which has been effectively full for a decade, is in the middle of a consultation period to add a third runway after getting the green light from Prime Minister Theresa May’s administration in 2016. Gatwick meanwhile is continuing to lobby the U.K. government for permission to also add another runway, with Chief Executive Officer Stewart Wingate saying in October that the airport would privately finance its own growth.

GIP, founded in May 2006, manages assets ranging from ports and pipelines to multiple airports and a vast wind farm in the North Sea. Over 10 years, GIP has expanded its roster of backers to include some of the world’s biggest sovereign funds and a slate of U.S. pensions.

Speculation grows that GIP and the consortium of Gatwick owners will sell the airport soon

January 4, 2018

Gatwick’s private equity owners have had a £175 million dividend as speculation mounts over a sale of the airport. The dividend, paid in October 2017, was up from £125m a year earlier and followed 6 months of rising passenger numbers and profits. Gatwick is owned by Global Infrastructure Partners (GIP) and a consortium of investors, who bought it for £1.5 billion in 2009 from the former airports monopoly BAA. They have improved the airport, attracting more airlines, and now have 44 million annual air passengers. That has increased the value of the airport to an estimated £6 – £8 billion. GIP also owned London City airport, which they sold almost 2 years ago for over £2 billion, making a huge profit. City experts believe GIP is now looking to sell one or both of its 2 remaining UK airports, Gatwick and Edinburgh – or at least reduce its stake. A sale of Gatwick would be a vast profit. There is speculation that GIP would have sold Edinburgh earlier, but held back due to the German election and complications of Brexit. Gatwick is still keen to build a 2nd runway, but the government prefers a 3rd Heathrow runway. Consultations on that will continue in 2018, and Gatwick continues to press for its runway – as that would raise the selling price.